22 December 2010

NYT Profiles Howard Brown Health Center and CEO Jamal Edwards

The New York Times profiles the financial scandal at the Howard Brown Health Center—"a longtime pillar of Chicago’s gay and lesbian community"—and its newish CEO Jamal Edwards. Edwards, an attorney who took over in June after the ouster of the last CEO, is the first Black to head the venerable institution, the largest LGBT health center in the Midwest.

"There is a history of mismanagement," Mr. Edwards said in an interview on Monday. Mr. Edwards ... exuded a quiet confidence as he talked about past financial problems and missed opportunities for growth. He refused to assign blame for the current mess.

Last spring, the news broke in the Windy City Times, a gay advocacy newspaper, that the center was under investigation by the National Institutes of Health for allegedly misusing money meant to finance an AIDS study. Many people around the city were angered by the reports. Although an internal investigation found that there was no intentional wrongdoing or “misappropriation for personal gain,” the center said that in October the matter was referred to investigators in the Department of Health and Human Services, which oversees the N.I.H. The institutes’ Office of Extramural Research said it would not comment on whether it is conducting a review.

Numerous people in the gay community pointed fingers at Michael C. Cook, who was the chief executive of Howard Brown. Mr. Cook’s 2005 appointment was hailed as a fresh start for the center, which was reeling from the arrest of a senior development officer on drug possession charges, followed quickly by the previous chief executive’s forced resignation. Mr. Cook, who could not be reached for comment on this story, was widely credited with boosting the center’s visibility and recruiting more minorities and women. ...

Mr. Edwards, meanwhile, had been appointed to the Howard Brown board in March as a nonvoting member. Formerly a litigator at Kirkland & Ellis, he also briefly served as the center’s pro bono general counsel. He was named chief executive and president in June. His first six months on the job have been eventful. In August, the N.I.H. compelled Howard Brown to turn over the balance of an ongoing federal AIDS study grant to Northwestern University, its longtime research partner.

The $539,000 transfer was a substantial blow to the center’s roughly $12.5 million annual operating budget. Howard Brown’s management eliminated 10 positions and curtailed employees’ health benefits earlier this year, then decided to replace the lost money through the $500,000 donation drive. As of Wednesday, the total raised was just over $400,000, and Editha Paras, the chief financial officer, said she was confident they would reach their goal by Thursday’s deadline.

Edwards' selection as CEO also reflects the changing demographic of the HIV epidemic in Chicago and HBHC's client base.

I know that there are those who reside up in the (lower) upper classes, and then there are those of us who live down below, and never the twain shall meet. I know that those of us who live down below just don’t understand how the world works.

But does the director of an organization such as this one really need to be paid $250,000 a year, as the Times article states? That means nearly half of this organization’s annual financial shortfall—large enough to cause them to lay off ten people and to curtail employee health benefits—was equal to the director’s salary alone!

I am not casting any aspersions on the ability of Mr. Edwards, whom I know nothing about. But can’t an organization like this one find someone perfectly competent for half that price? There are an awful lot of highly educated and highly skilled people out there who would love to be able to work for $125,000 a year, especially in this recession. And a job such as this one, that benefits the community instead of just some greedy corporation, is even more desirable!

Jim, I disagree. The CEO salary wasn't the reason why HB had financial problems. It was because $500K + was misappropriated and donations fell. Non-profits need to be managed by 'highly educated and highly skilled people'. If it were a company with a $13m budget and 100 employees, you wouldn't bat an eye. Plus, you want well connected CEOs who can bring in in major donors. t

The only problem I have are when non-profits dramatically overpay CEOs in comparison, if HB's budget were half as much with many less employees.

Talarico, for the record, I wasn’t saying that the current director’s salary had anything to do with the organization’s original financial problems. I was just making a comment about his current salary and its impact.

Actually, with a for-profit corporation, I would “bat an eye” at such a salary, but no one has any say about it, and a for-profit corporation isn’t trying to be of any good to society.

I've been at HBHB for a long time, and will say publicly to other staff and our board (who Jamal as nicely and gracefully lead out since this mess is largely their fault too) that his is the first time in a LONG time that we have a real CEO. In 6 months Jamal has more than earned his salary. Not just by raising money (today he announced we have raised almost $700,000 in 50 days and he has been busting his you know what to do it). He has also revised our budget and Programs and largely eliminated deficits, saved us tons of money by negotiating with businesses and contractors (and doing free legal work - he was a partner at a huge law firm in the past) and you'll see in the press soon that he worked a deal with Walgreens to improve and expand our pharmacy program and it might bring in another $500,000 or more a year - net income (and thats the conservative estimate). Again he did this in six months; he started June 1st. Can't wait for what's next.

HB is a not as easy or small as people thinks. We have about $15 Million budget and 200+ staff. There's medical, youth Programs, mental health, a huge research program with national studies, three retails stores (yes he has to run a retail business too) and now a growing and successful pharmacy program too. Most CEOs just have one thing to focus on; this guy has like 8 or 9 and remember he has to work twice as hard because we have way more scrutiny and work than usual with all the government investigations (which he is pretty much handling and seems to have earned the governments confidence back) and audits and legal matters (he does all our legal work for free, but we used to have to pay staff and lawyers for this). Today our anonymous donor who gave $200,000 said he did it because he cared about our mission, but also because Jamal impressed him and he met with him and really showed him a plan for success. And this donor said he isnt done and wants to work with Jamal and us in 2011 Need I say more.